RCKS Talk

25-Sep-2018

Monarques Gold Corp.

Monarques Highlights FS Changes That Should Improve Wasamac Economics

Impact: Mildly Positive

Monarques Gold has provided the initial parameters for the ongoing feasibility study (FS) on its Wasamac gold property in Quebec, which the company expects to complete by December 2018.

  • The company has indicated that it has taken a completely different approach to the assessment, design, engineering and costing for the mine in order to implement the latest technology and use a top-down rather than a bottom-up mining method
  • What we expect could be game changing for project economics is the use of twin ramps and a Rail-Veyor system underground to haul the mineralized material close to the railway, which will eliminate the significant CAPEX associated with building a shaft; the Rail-Veyor system is a new technology currently used at Agnico Eagle’s Goldex project in Val-d’Or
  • This news highlights the potential that this fresh approach could have on the economic viability of the Wasamac project, where the company currently has 2.6Moz in M&I resources grading 2.70g/t Au
Since acquiring the Wasamac project from Richmont Mines in 2017 the market has not ascribed any value to its potential economic value, which we expect may provide significant upside to the current share price upon release of the FS. Monarques continues to trade at a discount to peers (C$7/oz vs. peers at C$26/oz) and we believe the upcoming resource expansion drilling and technical studies including a conceptual study on Wasamac should help close the valuation gap to peers.

05-Sep-2018

Monarques Gold Corp.

Croinor Expands to the West and at Depth

Impact: Mildly Positive

Monarques Gold has reported additional assay results from the 2018 diamond drilling program at its Croinor Gold project 50km east of Val-d’Or, Quebec. The company has completed Phase 2 of drilling, which consisted of 5,327m of drilling in 27 holes where 26 of the holes struck mineralized zones.

  • Monarques highlighted hole CR-18-606 grading 8.24g/t Au over 9.0m from 328m, where the company had the objective of testing mineralization at depth to design the deepest stope for the mine plan; results support the theory that the deposit is still open at depth and to the west, which warrants further expansion drilling (Figure 1)
  • Infill drilling for the two areas for bulk sampling (Figure 1) continues to return high grade intercepts, which confirms grade continuity of the mineralized structures
  • The Croinor project is a fully permitted past producing mine with a pre-feasibility study (2018) with significant resource growth potential along strike and at depth, beyond those included in the current mine plan (Figure 2)
As the company continues to expand the mineralized zones at Croinor, we expect that once the 20,000m of drilling this year is included in an updated resource, there may likely be an increase in the projects resource base and an upgrade in resource classification. Monarques continues to trade at a discount to peers (C$7/oz vs. peers at C$27/oz) and we believe the upcoming resource expansion drilling and technical studies including a conceptual study on Wasamac should help close the valuation gap to peers.

31-Aug-2018

Monarques Gold Corp.

Beaufor Shifts from Production to Exploration

Impact: Neutral

Monarques Gold has announced that it plans to suspend production at the company’s Beaufor Mine in Quebec as of December 14, 2018 and place the mine on care and maintenance.

  • The decision to place Beaufor on care and maintenance was driven by a combination of low metal prices and low gold grades
  • At Beaufor, the company is refocusing on exploration, following up on recent high-grade results, including 10.38 g/t Au over 7.65m (QF1 vein) and 84.80 g/t Au over 1.65m (QF veins)
  • It is important to note that, the company’s custom milling operations at the Camflo mill, which grew 31% in FQ4, are expected to continue generating revenue as the company advances its key development projects Wasamac and Croinor
Monarques continues to trade at a discount to peers (C$8/oz vs. peers at C$27/oz) and we believe the upcoming resource expansion drilling and technical studies including a conceptual study on Wasamac that should demonstrate the projects potential and help close the valuation gap to peers.

17-Aug-2018

Monarques Gold Corp.

Operations Steady in FQ4; Projects Continue to Advance

Impact: Neutral

Monarques Gold has reported production results for its fourth quarter ending June 30, 2018 which were effectively in line with recent quarters.
  • Monarques produced 4,695oz Au this quarter, down 5% from the previous quarter. The modest decrease was the result of slightly lower tonnes processed (Figure 1)
  • Despite modestly lower production, revenue grew by 2% to C$10 million, as the company saw a 31% increase in custom milling operations at the Camflo mill that is expected to be maintained
  • The company continues to advance its growth projects and its planned feasibility study for Wasamac (expected in Q4) is expected to use the Rail-Veyor system (used by Agnico-Eagle at Goldex), which is likely to material reduce initial capital versus a traditional shaft based approach
Monarques continues to trade at a discount to peers (C$8/oz vs. peers at C$27/oz) and we believe the upcoming resource expansion drilling and technical studies including a conceptual study on Wasamac should help close the valuation gap to peers.

17-Jul-2018

Monarques Gold Corp.

Initial 2018 Results Point to Beaufor Mine-Life Extension

Impact: Mildly Positive

Monarques Gold reported its first set of results in 2018 from the planned 30,000m drill program at the Beaufor Mine. In our view, the results from these first 9 holes (2,047m) suggest mine life extension for Beaufor is possible; however, more work is needed.
  • 20.62g/t Au over 3.95m was intersected at QF1, which lies ~70m from the lower contact of Zone Q, the main zone currently in production at Beaufor
  • All five holes drilled at the 1700 project intersected mineralization, confirming the vertical and lateral extension of a mineralized lens containing several veins; more work to be done on the western extension
  • Results show strong gold potential in Zone Q footwall suggesting potential to increase the mineral resource in this area; the next round drilling, which is already underway, will test the West, Central and East sectors of QF1
Monarques continues to trade at a discount to peers (C$13/oz vs. peers at C$33/oz) and we believe the upcoming resource expansion drilling and technical studies including a conceptual study on Wasamac should help close the valuation gap to peers.

10-Jul-2018

Monarques Gold Corp.

Mineralization Expanded at Croinor

Impact: Mildly Positive

Monarques Gold has released new assays from its ongoing drill program at its Croinor Gold project, located near Val-d’Or in Quebec. Results demonstrated an extension of mineralization both along strike and at depth.
  • Highlights include: 9.4m of 3.08g/t Au intersected at 560m depth including 3.1m of 6.61g/t and 16.05g/t over 3.1m
  • Drilling has extended the deposit 180m horizontally to the northwest and 256m below the current resource envelop to 560m of depth
  • These Phase 1 results are from 16 drill holes reaching 4,584m of the total 20,000m 2018 program that began in March
Monarques continues to trade at a discount to peers (C$14/oz vs. peers at C$35/oz) and we believe the upcoming resource expansion drilling and technical studies including a conceptual study on Wasamac should help close the valuation gap to peers.

20-Jun-2018

Monarques Gold Corp.

Swanson Follows McKenzie Break; Regional Plan Strengthens

Impact: Positive

Monarques Gold announced a maiden mineral resource estimate for its Swanson gold project in Quebec. The estimate is for a combined pit-constrained and underground resource scenario.
  • Maiden resource at Swanson comes with a combined pit-constrained and underground resource.
  • Swanson falls in line with McKenzie Break to support larger strategy, of satellite deposits feeding central milling facilities
Monarques continues to trade at a discount to peers (C$14/oz vs. peers at C$36/oz) and we believe the upcoming resource expansion drilling and technical studies including a conceptual study on Wasamac should help close the valuation gap to peers.

15-Jun-2018

Monarques Gold Corp.

Initial Resource at McKenzie Break Adds to Regional Plan

Impact: Mildly Positive

Monarques Gold announced a maiden resource estimate for its McKenzie Break project in Quebec. The company released two resource scenarios: a combination open-pit and underground and an underground only scenario.

  • Maiden resource at McKenzie Break provides development options
  • McKenzie Break fits into the company’s larger plans to have multiple satellite deposits feed its two permitted milling operations
Monarques continues to trade at a discount to peers (C$16/oz vs. peers at C$36/oz) and we believe the upcoming resource expansion drilling and technical studies including a conceptual study on Wasamac should help close the valuation gap to peers.

25-May-2018

Monarques Gold Corp.

FQ3 Reflects One-Off Issue; Operations Expected to Improve in FQ4

Impact: Neutral

Monarques reported FQ3 2018 financials (ended March 31, 2018) with revenues of C$9.8 million (down 4.6% QoQ) following weaker than expected production during the quarter due to unanticipated equipment challenges and planned maintenance.

  • Equipment challenges resolved, production returned to normal in April which should support stronger FQ4 financials
  • Company ends quarter with strong cash balance of C$18.1 million, despite reporting QoQ decreases in EBITDA, operating cash flow and free cash flow.
  • Continues to work towards restarting the Beacon mill at end of 2018 to increase capacity to 2,350 tpd
Monarques currently trades at a discount to peers (C$14/oz vs. peers at C$33/oz) and we believe the upcoming resource expansion drilling and technical studies including conceptual study should help close the valuation gap to peers.

 

17-May-2018

Monarques Gold Corp.

Commissioning Beacon Mill to Meet Strong Demand

Impact: Positive

Monarques has announced the planned commissioning of its Beacon mill in Val-d’Or by Q4 2018. The mill is located only 500m away from the railway line and 10km from the company’s Beaufor Mine.

  • Monarques has allocated a C$1.5M budget to upgrading the facility to process 750tpd and is planning to submit an updated closure plan with the Ministry of Energy and Natural Resources before commissioning the mill
  • Decision to operate its fully-permitted Beacon mill results from excess demand for custom milling services
  • Custom milling at the 750tpd Beacon mill is expected to provide additional revenue to the company’s operating Camflo mill, which saw a 17% revenue increase in FQ3 2018
We view this as a positive development for the company as it is expected to bring the company’s operating mill capacity to 2,350tpd between the two mills. Monarques currently trades at a discount to peers (C$14/oz vs. peers at C$34/oz) and we believe the upcoming resource expansion drilling and technical studies including conceptual study should help close the valuation gap to peers.

23-Apr-2018

Monarques Gold Corp.

Solid Quarter FQ3; Production Expected to Improve

Impact: Mildly Positive

Monarques FQ3 2018 production was minimally affected by equipment challenges and planned maintenance, operations continue as usual for a stronger FQ4 2018.

  • Solid quarter at 4,932 oz produced, planned maintenance and unexpected equipment failure impacted production
  • Custom milling revenue increases 17% in FQ3 2018, should benefit overall financial performance
  • A solid quarter from Beaufor underpins efforts at other key assets.
Monarques currently trades at a discount to peers (C$14/oz vs. peers at C$32/oz) and we believe the upcoming resource expansion drilling and technical studies including conceptual study should help close the valuation gap to peers.

05-Apr-2018

Monarques Gold Corp.

Taking Steps to Transform Wasamac

Impact: Mildly Positive

Monarques has initiated the search for a low-cost alternative to transform Wasamac into an economic and profitable asset with announced conceptual study. 

  • Conceptual study to use local rail lines to transport ore to another mill/tailings facility in an effort to improve project economics, results expected May 2018
  • Current EV/oz discount likely relates to concerns regarding Wasamac’s economics as a traditional operation, this study could transform that perception and re-rate the stock
  • Drill results from ongoing operations and operating results from the company’s second full quarter at Beaufor are likely to be near-term catalysts.
Monarques currently trades at a discount to peers (C$18/oz vs. peers at C$31/oz) and we believe a positive result from this study along with other catalysts are likely to close the valuation gap to peers.

27-Mar-2018

Monarques Gold Corp.

Continued Drilling Success at Beaufor Points to Mine Life Extension

Impact: Mildly Positive

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Final drill results from 2017 drilling are encouraging, 2018 drilling is expected to follow-up on these results.

  • Results suggest resource growth and incremental mine life extension likely
  • Definition drilling confirms continuity
  • 30,000m of exploration and definition drilling is planned for Beaufor in 2018
 
We believe the upcoming drill results from 2018 drilling as well as the planned technical studies should help close the valuation gap to peers, Monarques currently trades at C$18/oz vs. peers at C$33/oz.

01-Jan-2018

Monarques Gold Corp. (TSXV:MQR)

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